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Direct Stafford Loans

Direct Stafford Loans, from the William D. Ford Federal Direct Loan (Direct Loan) Program, are low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. Eligible students borrow directly from the U.S. Department of Education (the Department) at participating schools.


Direct Stafford Loans include the following types of loans:

  • Direct Subsidized LoansDirect Subsidized Loans are for students with financial need. Your school will review the results of your Free Application for Federal Student Aid (FAFSA SM ) and determine the amount you can borrow. You are not charged interest while you’re in school at least half-time and during grace periods and deferment periods.


  • Direct Unsubsidized LoansYou are not required to demonstrate financial need to receive a Direct Unsubsidized Loan. Like subsidized loans, your school will determine the amount you can borrow. Interest accrues (accumulates) on an unsubsidized loan from the time it’s first paid out. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.


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